Board-certified real estate attorney Gary M. Singer writes about the housing market in this space each Friday. To ask him a question about short sales, mortgages, refinancing, homeowner's associations or any other residential real estate topic, click here.

Q: We make a decent living and can afford our mortgage payments. Our house is slightly underwater and times are lean, but we are getting by. We are not late on our payments and like our home. We have tried several times to get a loan modification, but our lender keeps telling us that we make enough money to afford our payments. Is there anything we can do? – David

A: Not really. I have been getting this question a lot lately, and the sad truth is that most lenders will not work to lower the payments on a loan if the borrower makes enough money to afford the payment. Typically, lenders will look to see if you earn enough so that 31 percent of your gross income can cover the mortgage payment, plus taxes and insurance. Barring special circumstances, such as a medical issue that requires expensive care, if you make enough money to afford you payment, your lender is not going to lower it. Often people will tell me that the other debt, such as credit cards, student loans and car payments, is crushing them. But your mortgage lender would prefer that you keep paying the mortgage and default on the others. However, as I have reported before, you never know what might happen, so it never hurts to try. But be realistic and don’t waste money on some fly-by-night company selling you a miracle.

Q: Do I need to look at a property tax report for a foreclosed home I’m trying to buy at an auction? – Steve

A: Absolutely. When you purchase a property at an auction, you are taking the home as is, with no warranties or guarantees. You will be responsible for all taxes on the property, homeowner’s association back dues, city liens and more. Further, if the foreclosing lender did not properly foreclose out all junior lien-holders, you will be getting those problems too. Purchasing properties at auction is a tricky business. I don’t recommend getting involved unless you know what you’re doing and are willing to spend hundreds of dollars getting reports on each property that you want to buy.

The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed, nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

Leave a Reply

COMMENT BOARD GUIDELINES:

You share in the SunSentinel.com community, so we just ask that you keep things civil.
Leave out the personal attacks. Do not use profanity, ethnic or racial slurs, or take shots at anyone's sexual orientation or religion.
If you can't be nice, we reserve the right to remove your material and ban users who violate our Terms of Service.

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Name (required)

E-mail (will not be published) (required)

Website

Comment:

Verification (needed to reduce spam):

Advertisement

About the authors

PAUL OWERS is a West Palm Beach native who graduated from the University of Central Florida in 1989. He covers the housing market for the Sun Sentinel after spending seven years on the real estate beat for that daily paper just up the road. He has impeccable timing, arriving at the Sun Sentinel on the very day that Hurricane Wilma pummeled South Florida. The real wrath came in early 2006, from readers, when he wrote that the five-year housing boom was over. They argued, cursed and complained before grudgingly admitting he was right.Follow @paulowers